Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (108912)	11/20/2001 2:59:40 PM
From: Wyätt Gwyön	Respond to of 152472

"Quotational value" is a statement of fact at a given point in time, whereas "fundamental value" is an opinion based on an array of assumptions and unavoidably influenced by the preparer's personal biases. fine, but you are simply defining facts down and trying to still have them mean something. perhaps it is a fact that today it is 85 degrees in a mountainous locale. but looking at my almanac, i can see that normally at this time of year, the temperature is 25 degrees. due to the high temperature (your "fact"), nobody buys the last coat and sleeping bag in the general goods store. due to my reliance on an "opinion" that the weather will probably get colder, i buy the coat and sleeping bag on sale. all just facts and opinions. you can make these words apply to anything you like. only question is: do they still mean anything, and is their meaning of value.

To: Uncle Frank who wrote (108912)	11/20/2001 3:15:47 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

The 18 month bear market hasn't changed their underlying value 1 iota. Uncle Frank, you are beginning to sound more and more like me. that is totally what i believe--that they are fundamentally still worth much, much less than their current quotes imply.

To: Uncle Frank who wrote (108912)	11/20/2001 3:26:40 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 152472

A rational person/investor wouldn't be a bear or a bull. The rational approach would be to remain neutral, and attempt to capitalize on imbalances in the market. well, let's keep in mind that mucho occasionally sez things tongue in cheek. the rational approach you describe--agnostic, capitalizing on "imbalances", i.e., basically a trader--relies on the heretofore academically unsubstantiated position that traders can outperform the market. in reality, everyone underperforms the market on average, because the collective returns of market participants equal the market return MINUS trading costs. frequent traders probably underperform more substantially in aggregate due to their higher costs...and it is worth keeping in mind that there is considerable positive survivorship bias to this group as unsuccessful traders can quickly go bankrupt. i believe a distinction can be made between what is "rational" and what "works". rational thinking would be based on fundamental returns. since the market is frequently skewed from this intrinsic value, what works can likewise differ from what is "rational". the only defense for "rational" i believe in is that over long periods of time, the weight of fundamentals overcomes all short term volatility to deliver the returns expected from fundamentals. this gets back to the grantham analogy of throwing handful of feathers from a tall building--you have no idea what their flight path and flight duration will be (unpredictable, short-term volatility = unpredictable short term), but you can be reasonably sure they will eventually land somewhere due to gravity (fundamental, expected return over the long term).